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GEORGIA



 

In-depth Business Intelligence

Key Economic Data
 
  2003 2002 2001 Ranking(2003)
GDP
Millions of US $ 3,937 3,324 3,100 126
         
GNI per capita
 US $ 830 650 590 145
Ranking is given out of 208 nations - (data from the World Bank)

Books on Georgia

REPUBLICAN REFERENCE

Area (sq.km)
69,700 

Population 
4,693,892 

Principal 
ethnic groups 
Georgians 68.8%
Armenians 9% 
Russians 7.4%

Capital 
Tbilisi 

Currency 
Lari

President 
Mikhail Saakashvili



Update No: 289 - (27/01/05)

After a chaotic secession from the Soviet Union in 1991, Georgia fell under the sway of Edward Shevardnadze, a former Soviet leader, in 1992. The Caucasian republic appeared set for a bright future, but Georgia's fractious regions undermined political stability and stymied sources of revenue. Further pressure came from Russia, which accused Georgia of sheltering Chechen rebels and imposed a damaging visa-barrier in 2000.
Georgia's problems forced Mr Shevardnadze to resort to increasingly desperate measures to stay in power. In 2000 he was re-elected in a rigged election and by 2002 many saw his regime as corrupt and illegitimate. A parliamentary election marred by fraud brought opponents to the streets and Mr Shevardnadze's grudging resignation in November 2003. In January 2004 Georgians elected Mikhail Saakashvili, a 36-year-old American-educated lawyer, as his successor. An opportunistic and judicious promoter of Georgia's national cause, Mr Saakashvili has managed to reassert control over Ajara, a breakaway region. Restoring sovereignty over South Ossetia and Abkhazia, both home to Russian-oriented separatists, requires the patching up of relations with Moscow.

Presidential election in Abkhazia 
Officials in Georgia's separatist republic of Abkhazia on 14th January pronounced Sergei Bagapsh the winner of the repeat presidential vote of 12th January. Final results released by the Central Election Commission show Bagapsh won the presidential race with more than 91.5 of the vote. His only rival, People's Party Chairman Yakub Lakoba, garnered less than 5 per cent. 
Lakoba told Russia's ITAR-TASS news agency that he believes the election was not democratic, but said he will not appeal its outcome. Outgoing President Vladislav Ardzinba today congratulated Bagapsh on his victory. 
The repeat presidential was ordered after a post-election crisis that last fall brought Abkhazia to the brink of civil war. 
Bagapsh, who had technically won the previous polls in October, this time ran on a joint ticket with his former main rival, ex-Prime Minister Raul Khadjimba. The disputed poll caused months of political deadlock which ended only when Russia forced a resolution by closing the border, Abkhazia's only land route to the outside world. Bagapsh then agreed Khadzhimba could run as his deputy. 
Abkhazia won effective independence from Georgia in a 1992-93 war, but its economy is still devastated. Once-grand buildings in the capital Sukhumi are pitted with bullet holes and stand open to the sky. Russia props up the economy by paying pensions, giving out passports and allowing cross-border traffic. 
Georgia, home to 200,000 ethnic Georgian refugees who fled the war, has pledged to regain control over Abkhazia, as well as over another rebel region, South Ossetia. 
But Bagapsh said he would not compromise to improve frozen relations with Tbilisi. "Abkhazia will hold dialogue with Georgia mediated by Russia and the United Nations only on an equal basis," he said.

New Abkhaz president backs Moscow ties
The winner of Moscow-backed elections in the rebel Georgian region of Abkhazia pledged close ties with Russia and refused any deal that would return sovereignty to Tbilisi. Soon after official results of the re-run declared him the new president, Sergei Bagapsh told a news conference: "foreign policy will only be directed towards integration with Russia." 
Russia called instead for talks between Abkhazia and Tbilisi now that the political turmoil that followed the original disputed poll in October had ended. "We have always emphasised that the sooner the situation was regulated, the sooner conditions could be created for talks between Tbilisi and Sukhumi on Georgia-Abkhazia regulation," said Russian Foreign Minister Sergei Lavrov. "I believe that now the issue has apparently been concluded, it will be possible to renew such talks."

Georgian Security 
Kazakhstan officials are in talks with Azerbaijan to send crude oil through the pipeline from Baku, Aliyev said, without being more specific. The pipeline will ship 1 million barrels a day through Georgia, where President Mikhail Saakashvili is trying to assert control over secessionists in South Ossetia and Abkhazia provinces. 
''We are sure that the Georgian government will fulfil all its commitments to security over their portion of the pipeline,'' Aliyev said. A separate pipeline from Baku to Georgia's Supsa port on the Black Sea ''has been working for years without any problems,'' he said. 
South Ossetia and Abkhazia, each with a population of about 100,000 people, declared independence in 1992 after the Soviet Union collapsed. Both maintain ties to Russia. Georgian forces clashed with South Ossetian separatists in August. 
''Georgia and Azerbaijan have similar problems, which are aggressive separatism,'' Aliyev said. Azerbaijan since 1993 has had a dispute with neighbouring Armenia over control of the Nagorno- Karabakh region. 
Georgia in February plans to sign a military and economic treaty with Russia to ease tensions that brought them to the brink of war this year, Saakashvili said on Nov. 22. 

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ENERGY

Georgia can triple oil production in 2005

Georgia plans to triple oil production to 150,000-300,000 tonnes in 2005, against 100,000 tonnes in 2004, Guram Varshalomidze, director general of the state-run oil company, AO Gruzneft, said, Interfax News Agency reported.
The forecast is based on the readiness of foreign oil companies working in Georgia to increase investments in exploring and producing hydrocarbons in the country, Varshalomidze said. Canargo Energy, one of the founders of the Georgian-British company GBOC decided to invest €57m in drilling 15 horizontal wells at the Ninotsmind field in 2005.
According to the business plan of US oil company Frontera, it plans to invest €37m in drilling new wells at the Taraban field in 2005. Experts predict that new fields around Tbilisi, with reserves similar to the Samgori-Patardzeul field are due to be opened in the next two or three years, Varshalomidze added. "Some 2-2.5m tonnes of oil could be produced there annually over the next several years, according to preliminary data," he said.
Varshalomidze said the big plans are connected to the work of the US company Anadarko on Georgia's Black Sea shelf. He is convinced that commercial oil fields will be discovered there that could produce up to 3.0-3.5m tonnes of oil a year.
Georgia has 16 oil fields, one oil and gas field and one gas field, most of which have already used up their resources. Combined production is 27.5m tonnes of oil and 449.6m cubic metres of natural gas a year. Georgia's forecast reserves are 850m tonnes of oil, of which 450m tonnes are on shore fields and 400m tonnes are off shore. Forecast reserves of gas are estimated at 400bn cubic metres.

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FOREIGN COOPERATION

Georgia, Russia sign rail ferry service agreement

A rail ferry service between Russia and Georgia will open in 10 days.
Georgian Economic Development Minister, Aleksi Aleksishvili, and Russian Transport Minister, Igor Levitin, signed an agreement to this effect recently. The agreement provides for the development of rules for launching a ferry and freight transportation. It also provides for the setting of temporary rules for the ferry's operation until April. 

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FOREIGN INVESTMENT

Israeli businessmen to invest in Georgia

Director of the Eurasia Department at the Israeli Ministry of Foreign Affairs, Shmuel Meirom, said Israeli businessmen are interested in investing in the infrastructure of Georgia and in construction of roads and buildings, The Messenger reported.
Meirom was quoted in an interview as saying that trade balance between the two countries is restricted but the tendency is improving. Meirom also spoke of the possibility of signing an agreement with Georgia to facilitate conditions for businessmen of both countries. "I have already talked to some Israeli businessmen, who are very interested in building and in buying pieces of land here in Tbilisi. Their aim is to build some offices, buildings, roads and other infrastructure," he stated. Meirom visited Georgia for the first time since 2001. According to him, he sees a significant improvement in the country's infrastructure since then. "I see here first of all new buildings and new hotels. And the roads, by the way, are better than they were before," stated Meirom who was in Tbilisi in connection with the arrival of new Israeli Ambassador, Shabtai Tzur, recently. Meirom also commented on the reforms that are underway in other post-Soviet countries. Analysing Georgia's unique role among the post-Soviet countries, Meirom highlighted its importance as a transit country. He thinks that the Black Sea ports and oil and gas pipelines can make Georgia particularly attractive in this respect.

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TRANSPORT

Georgia, Azerbaijan, Turkey sign rail construction declaration

Georgia, Azerbaijan and Turkey have signed a joint statement on the construction of a Kars-Akhalkalaki-Tbilisi railway at the Georgian Ministry of Foreign Affairs. The statement was signed by Georgian Economic Development Minister, Aleksi Aleksishvili, Minister of Transportation of Turkey, Binali Yildirim, and Deputy Minister of Transport of Azerbaijan, Musa Panahov, Kavkasia-Press News Agency reported.
Aleksi Aleksishvili said at a news briefing after the signing ceremony that a foundation had been laid for the implementation of the historic project of the century. "We have agreed that the Kars-Akhalkalaki-Tbilisi railway project will be implemented at an increased pace. A working group will be set up to work on specific details of the project," he said.
Aleksishvili also said that the estimated cost of the project was US$350m, of which US$200m will have to be spent on the construction of a railway link between Kars [Turkey] and Akhalkalaki [Georgia] and US$150m on restoring the Akhalkalaki-Tbilisi section. The project will be financed by all three parties.
"The Turkish side will start working on the project for the Kars-Akhalkalaki section in 2005. Thanks to the Baku-Tbilisi-Ceyhan oil pipeline, Georgia, Azerbaijan and Turkey have acquired extensive and important experience in the implementation of joint projects," said Aleksishvili.
Binali Yildirim said that modern roads would be built alongside the Kars-Akhalkalaki-Tbilisi railway, providing a direct link with Europe.

Boat train service to be launched between Georgia and Turkey in 2005

A boat train service between Poti, Georgia, and Samsun, Turkey, will be launched this year, Kavkasia-Press News Agency reported.
Georgian Economic Development Minister, Aleksi Aleksishvili, said at a news briefing that an agreement to this effect was reached at the seventh meeting of the joint Georgian-Turkish transport commission on 28-29 December in Tbilisi.

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